Al Gore on Tax Reform

2000 Democratic Nominee for President; Former Vice President

$500B to people earning under $100K; via 30 targeted cuts

In the fierce debate over tax cuts between Gore and Bush, one fact has gone unnoticed: Both men would allocate roughly the same amount of money-$500 billion over nine years-to people making less than $100,000 a year. The other $800 billion of Bush’s
tax cut, including repeal of the estate tax, would mostly go to people in the wealthiest tax brackets. Gore offers virtually nothing for taxpayers making that much money.

Gore selectively targets his tax cuts to married couples and families-single,
childless Americans are generally ignored-and also offers credits to nearly 30 million of the working poor who have little or no tax liability. Gore has proposed about 30 targeted tax cuts, generally in four areas: retirement
savings, health care, education and the environment. Bush, instead, emphasizes cutting tax rates, especially the highest rates, so that most of the cuts flow to the people who pay most of the taxes.

Source: Glenn Kessler, Washington Post, p. A10
, Oct 17, 2000

Federal matching funds for poor and middle class savings

Q: How would your tax cut benefit a single woman with no dependents?

GORE: If you make less than $60,000 a year and you invest $1,000 in a savings account, you’ll get a tax credit which means that the federal government will match your $1,000
with another $1,000.

If you make less than $30,000 a year, you put $500 in a savings account, the federal government will match it with $1,500.

If you make more than $60,000 and up to $100,000, you’ll get a match, but not as generous.

You’ll get
access to lifelong learning and education, help with tuition if you want to get a new skill or training.

If you want to purchase health insurance, you will get help with that.

If you are part of the bottom 20% or so of wage earners, then you will
get an expanded Earned Income Tax Credit.

And if you have an elderly parent or grandparent who needs longterm care, then you will get help with that.

Except for wealthiest, exempt people from estate tax

GORE [to Bush]: Under the plan that I’ve proposed, 80 percent of all family farms will be completely exempt from the estate tax, and the vast majority of all family businesses would be
completely exempt, and all of the others would have sharply reduced. The problem with completely eliminating it goes back to the wealthiest 1 percent. The amount of money that has to be raised in taxes from middle class families would be a heavy burden.

BUSH: Eliminate the death tax completely because people shouldn’t be taxed twice on their assets. It’s either unfair for some or unfair for all. I think if you’ve got tax relief, everybody benefits.

Cut taxes for 99% of middle class, not the wealthiest 1%

GORE: He would spend more money on tax cuts for the wealthiest 1% than all of the new spending that he proposes for education, health care, prescription drugs and national defense, all combined. Under my proposal, for every dollar that I propose in
spending, I will put another dollar into middle class tax cuts.

BUSH: We’re going to hear some phony numbers about what I think. Over the next 10 years, there’s going to be $25 trillion of revenue. Why don’t we pass $1.3 trillion of that back to the
people who pay the bills? I want to share some of that money with you, so you’ve got more money to save and dream for your families. It’s the difference between government making decisions for you and you getting more of your money to make decisions for
yourself.

GORE: I agree that the surplus is the American people’s money. That’s why I don’t think we should give nearly half of it to the wealthiest 1%, because the other 99% have had an awful lot to do with building our prosperity.

make up to $10,000 in college tuition costs tax deductible;
create tax-advantaged accounts to save for education and training; create a new refundable After-School Tax Credit.

Source: The Economist, “Issues 2000 Special Briefing”
, Sep 30, 2000

End marriage penalty; reform estate tax; targeted cuts

I’m fighting for a full range of targeted tax cuts for middle-class families. To help you save for college and retirement. To pay for health insurance and child care. To reform the estate tax. And to end the marriage penalty.
But let me say it plainly: I will not go along with a huge tax cut for the wealthy at the expense of everyone else and wreck our good economy in the process.

Under the tax plan the other side has proposed, for every ten dollars that
goes to the wealthiest one percent, middle-class families would get one dime. And lower-income families would get one penny. It gives the most to those who need it the least -- and the least to
those who need it the most. And that’s just wrong. Instead, let’s cut taxes for the people who have the hardest time paying taxes and saving for the future.

Tax cuts to benefit middle-class, not just the rich

Gore took aim at Bush’s plan for $1.3 trillion in tax cuts over 10 years. Gore is offering $500 million in cuts over the same period, targeted at middle- and low-income households. Gore said the plan would help boost savings and aid families saving for
college, while Bush’s plan would offer a typical family less than it would yield the richest Americans. “We don’t begrudge the wealthy a tax cut. I will never support a tax cut for the wealthy, at the expense of everyone else, that wrecks our economy.”

Source: Staff & Wire Reports, CNN.com
, Aug 21, 2000

Don’t eliminate gas tax; ask oil interests to charge less

On gas prices: Gore said, “I’m pleased that Saudi Arabia is proposing to increase production. I call on the big oil companies to let that pass through in the form of price reductions at the gasoline filling stations. What we need is not a trickle
of relief, we need significant reduction.”

Bush said, “The long-term solution is an energy policy. The short-term solution is the price of crude on the market. The administration ought to convince OPEC to increase the supply of crude oil.”

Source: AP article in Washington Post
, Jul 3, 2000

Eliminate the marriage penalty for working families

Gore supports marriage penalty tax relief by increasing the standard deduction, so that a married couple would get the same standard deduction as if they remained single. Raising the standard deduction for married couples filing joint returns to
twice that of a single taxpayer would deliver substantial marriage tax relief to middle-class families. Everyone who claims the standard deduction would benefit from the tax relief, especially middle class families.

Source: Press Release, “Working Families”
, Jun 15, 2000

$500B in tax cuts targeted to working families

Declaring that the “right kind of tax cuts are good for our economy,” Gore today discussed his plan for a $500 billion in tax cuts for working families. Among other things, Gore’s plan would:

Eliminate the marriage penalty for working
families.

Make health care more affordable [via] a 25% tax credit for premium costs for each employee of a small business that decides to join a purchasing coalition.

Help families care for children and loved ones [via] making
the existing child care tax credit refundable; a new refundable After-School Tax Credit; and a $3,000 tax credit for long-term care.

Help families save for college and job training tax free [via] tax deductions for up to $10,000 in college
tuition costs.

Create 401 (j) accounts to allow families and employers to put money away to save for education and training tax-free.

Source: Press Release, “Working Families”
, Jun 15, 2000

Help caregivers with tax reform, nursing home alternatives

Gore called for giving families with long-term care needs and their caregivers a $3,000 tax credit and reforms making it easier for Medicaid to cover care at home and in community settings in addition to nursing homes. The total cost
of Gore’s new National Caregiving and Family Support Initiative is nearly $30 billion over ten years. Gore would:

Provide caregivers with support services, information, and respite. Under Gore’s plan, states would expand the
availability of adult day care, respite care and home care services. At least 80% of Gore’s Initiative would be set aside for adult day care, home care coordination and other respite services.

Make tax credit available to Americans with
long-term care needs -- and friends and family who care for them.

Make it easier to provide care at home, in the community.

Source: Press Release, “National Caregiving Initiative”
, Jun 7, 2000

$250B over 10 years in targeted tax cuts

Gore has proposed allocating $250 billion to $300 billion to tax cuts over the next decade for specific goals. In particular, he supports expanded tax incentives for education and retirement savings, a reduction in the marriage penalty for
low- and middle-income couples, and a permanent extension of the tax credit for corporate research and development.

Source: New York Times, p. 22
, Feb 27, 2000

Save Social Security, Medicare, and address debt before cuts

Q: Why won’t the candidates just keep the tax rates the same & pay off the national debt?A: I think this risky tax scheme is reckless & would be very harmful to our country, because what we need to do instead is to use the surplus to safeguard Social
Security first and foremost. Secondly we need to put money from the surplus into the Medicare program to strengthen it before the retirement of the baby boom generation. Then we need to pay down the national debt because that keeps interest rates low.

Source: Democrat debate in Harlem, NYC
, Feb 21, 2000

Rules out tax increase in good economic times

On the appropriate time for a major tax cut: My [proposed cuts] are relatively modest, between $200 billion and $350 billion [over 10 years]. I don’t rule out [a larger
cut] in [a slowdown]. It depends on the circumstances. But I rule out a tax increase, barring some dramatic change in our economic circumstances.

Source: Interview in Business Week, p. 42-43
, Dec 20, 1999

Eliminate estate taxes for the little guy, not the wealthy

Gore’s plan could eliminate estate taxes for more than 90% of family farms and more than 70% of small businesses. “Some on Capitol Hill believe we should completely repeal the estate tax and give a massive tax
break to the wealthiest Americans Under their plan, fully half the benefits go to less than 3,000 families.” Gore’s plan would raise the tax exemption from $2.6 million to $5 million for each family.

Al Gore on Critique of Bush tax plan

Bush’s tax plan is class warfare on behalf of billionaires

Gore said Bush’s proposed elimination of the estate tax would give $25 billion to the wealthiest 3,000 families in America. “What he is really saying is a massive redistribution of wealth
from the middle class to the wealthiest few. It is in fact a form of class warfare on behalf of billionaires,” Gore says.

Source: Katharine Q. Seelye, NY Times
, Nov 1, 2000

Impossibly large tax cut will yield big debt and recession

I have to assume that my opponent’s tax plan was designed in some kind of supply-side vacuum. Because, no matter how you add it up, it means a return to massive deficits. According to the American Academy of Actuaries, his plans make paying down
the debt - and I quote - ‘impossible.’ I will not let us be dragged back into a cycle of big tax giveaways to the wealthy, big deficits, big debt and repeat recessions.

That wouldn’t just be bad for our budget and our economy, it would be potentially
devastating for America’s families and American business. That huge tax cut would mean higher interest rates, which would make it harder to buy a home and which would choke off borrowing and investment in the private sector. And that, in turn,
would mean lower productivity and lower levels of economic growth. Our people have worked too hard and achieved too much to waste it on the wrong kind of tax cut that puts the economy at risk.

Source: Remarks at Portland (OR) Community College
, Oct 31, 2000

We both target our tax cuts: Bush targets the rich

My opponent likes to criticize my tax cuts for being targeted. So let’s be clear on this. Both of us have proposed targeted tax cuts.

The difference is, the Bush plan targets the benefits primarily to the top 1% - families who make, on average, $1
million a year. My tax cut targets the benefits to middle-class families. Senator McCain said it best when he raised concerns about then governor’s plan during the primaries: “I don’t think Bill Gates needs a tax cut, but I think you and your parents do.

Source: Remarks at Portland (OR) Community College
, Oct 31, 2000

Comparison of wealthy tax cut to middle class exaggerated

Gore used the audience to illustrate his argument that Bush’s tax plan favors the rich. If all 130 audience members were middle class, he said, their combined tax cuts under the Bush plan would be less than the cut enjoyed by “just one member” of the
wealthiest 1% of taxpayers.

Gore’s assertion was misleading, if not wrong. Using an analysis by Citizens for Tax Justice, the average annual tax cut for members of the top 1% under the Bush plan would be $46,072. Gore relied on a definition of
middle-class at the low end of the spectrum - a range of $24,400 to $39,300 per household, with an average of $31,000. The average tax cut for that group would be $453 under the Bush plan, CTJ said. Multiplied times 130, the total is $58,890 - $12,818
more than the average tax cut for the top 1%. The vice president’s example would have worked only if there were no more than 101 people in the audience. Campaign aides said Gore had in mind comparing to someone making $1 million a year.

Single wealthy person’s tax cut equal to roomful of people

BUSH [to Gore]: Under my plan, the wealthy people pay 62% of the taxes today; afterwards, they pay 64%. This is a fair plan. You know why? Because the tax code is unfair for people at the bottom end of the economic ladder.

GORE: Look, this isn’t about Gov. Bush, it’s not about me. It is about you. If everyone here in this audience [of several hundred] was in the middle of the middle class, then the tax cuts for every single one of you, all added up, would be less than the
tax cut his plan would give to just one member of that top, wealthiest 1%. Now, you judge for yourselves whether or not that’s fair.

BUSH: Fifty million Americans get no tax relief under his plan.

GORE: That’s not right.

BUSH: And you may not be one of them; you’re just not one of the right people.

GORE: That 50 million figure, the journalists are the keepers of the scorecard and whether or not you’re using facts that aren’t right. And that fact is just not right.

Claim that Bush benefits “top 1%” only true with estate tax

GORE: Bush would spend more money on tax cuts for the wealthiest 1% than all of the new spending he proposes for [social programs plus defense].

ANALYSIS: Gore uses a report by Citizens for Tax Justice, an advocacy organization whose mission
includes “requiring the wealthy to pay their fair share.” CTJ says that 42.6% ($546B) of Bush’s tax cut would go to the top 1% income group, those who earn at least $319,000 annually. CTJ INCLUDES repeal of the estate tax, which they say will help the
top 1% almost exclusively.

Gore has applied CTJ’s figure of 42.6% to the $1.3 trillion value that Bush gives his tax cut, and comes up with $546 billion in tax cuts for the wealthiest 1%. And he contrasts that with the roughly $475 billion in Bush’s
spending initiatives. But if the estate tax is REMOVED from the equation, Bush’s tax cut falls to $1.06 trillion and CTJ says 30% of it goes to the wealthiest 1%. That totals $318 billion, about $157 billion less than Bush’s new spending initiatives.

Yes, it’s your money-but it’s your programs too

“The other side has placed its top priority on taking virtually all of this projected surplus and giving it all in the form of a giant tax cut, mainly to the wealthy,” Gore said. “And their theory is that’s going to be good for the country,
and they say it’s your money. Well, it is your money. But it’s your Medicare, it’s your Social Security, it’s your environment, it’s your school system, it’s your country.”

Source: Kevin Sack & James Dao, NY Times
, Aug 31, 2000

Too large a tax cut would wreck economy & military readiness

Gore said that Bush’s tax cut would plunge the country into deficits, and added that it would “wreck our good economy and make it impossible to modernize our armed forces and keep them ready for battle.”

Bush defended his tax-cut proposal.
I’m not changing my opinion on it. It’s the absolute right thing to do for America. Bush’s plan would reduce federal tax rates across the income spectrum, lowering the highest rate to 33% from 39.6% and the lowest rate to 10% from 15%.

Source: Frank Bruni, NY Times
, Aug 23, 2000

Bush’s tax cut gives average family only 62 cents

I will not go along with a huge tax cut for the wealthy at the expense of everyone else and wreck our good economy in the process. Under the tax plan the other side has proposed, for every ten dollars that goes to the wealthiest one
percent, middle class families would get one dime. And lower-income families would get one penny.

In fact, if you add it up, the average family would get about enough money to buy one extra Diet Coke a day. About 62 cents in change.
Let me tell you: that’s not the kind of change I’m working for.

I’ll fight for tax cuts that go to the right people - to the working families who have the toughest time paying taxes and saving for the future. I’ll fight for a new, tax-free
way to help you save and build a bigger nest egg for your retirement. I’m talking about something extra that you can save and invest for yourself. Something that will supplement Social Security, not be subtracted from it.

Bush’s tax plan is “economic snake oil”

Al Gore today ridiculed Bush for proposing an economic plan laced with “economic snake oil,” a plan with a tax cut that Mr. Gore said was so reckless even the Republicans in Congress had better sense than consider it. “Governor Bush’s tax scheme
is so risky, so reckless, that just yesterday the Republican-controlled House of Representatives, given an opportunity to vote for it, turned it down, turned the other way, said we don’t want to even cast a vote on that thing,” Gore said.

Source: Katharine Q. Seelye, New York Times
, Mar 17, 2000

$792B tax cut is a “risky tax scheme”

In virtually every public appearance, Gore ominously utters the words “risky tax scheme.” He has been chanting that mantra since 1996; in his debate with Jack Kemp, he chanted it eight times. Then, it was a put-down of Bob Dole’s proposed 15% tax cut;
now it’s a put-down of the tax cuts pending in Congress.